Starting to shimmy?12 Jan 2018 10:53
Could this finally be turning the corner?
Think patience of long-term holders may finally pay off in the next 12-18 months. I believe this company was always engineered with a view to making it a buyout target. This looks like a "rinse and repeat" of what the founders did with their last gaming company.
"The business was set up by the team behind Cashcade Limited, creator of bingo brand Foxy Bingo, which was sold to PartyGaming for just under �96 million in 2009."
The recent deal with Jackpot Joy could have more significance than was reported in the RNS, according to analysts at Align Research.
"We see the deal with Jackpot Joy as a platform for ultimately a full takeover subject to the anticipated operational performance playing out over the next 12-18 months. With a market cap in excess of �600m on Jackpot Joy �s (JPJ) part and GMR capped at present at less than �25m, such an acquisition would be a mere morsel to JPJ and, given the higher rating of JPJ�s stock, would be earnings accretive if done in stock. We do in fact suspect that the convertible basis of the debt is to give JPJ an equity foothold on the register for an outright bid subject to seeing how the tie up plays out.
There has been a seller overhanging the stock for some months now and as is usually the case upon the clearance of such a seller, we would expect the stock to re-rate with a first target the recent placing price of 11p, recalling that management participated in this placing with decent sums too and so new entrants on the register are able to enter at a circa 20% discount. We doubt this discount will last much longer."
(Bear in mind, this report and the initial 11p price target was pre Health Lottery news, so we could really do with an update on the analysis / price target to add in this significant factor ).
http://www.alignresearch.co.uk/equities/align-researchs-top-10-conviction-picks-for-2018/
GLA & DYOR.
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